MiBanco Banco de La Microempresa S.A.

The stable outlook on MiBanco reflects that on its parent, BCP, as long as the former remains a core subsidiary to the group. The stable outlook on BCP reflects the outlook on Peru. We expect the ratings on the bank to move in tandem with those on the sovereign in the next 12-24 months because the sovereign creditworthiness influences BCP given its high exposure to the domestic market. We could downgrade MiBanco if we take the same action on BCP, which in turn could happen if we downgrade Peru. We could upgrade BCP and MiBanco if we were to take a similar action on the sovereign, while all other rating fundamentals remain unchanged. However, we think this scenario is unlikely

...We expect the bank to continue benefiting from support of its parent, BCP. We consider MiBanco Banco de La Microempresa S.A. (MiBanco) as a core subsidiary of BCP, thus we equalize our ratings on it with BCP's '###' group credit profile. MiBanco will retain stable intrinsic creditworthiness in the next few years. Its '##+' stand-alone credit profile (SACP), which is our view of the bank's creditworthiness on its sole merits excluding group support, reflects its leading market position in the Peruvian microfinance segment, healthy earnings prospects after the consequences of the pandemic fade, and solid capital levels to absorb temporarily rising credit losses. Moreover, the bank has an adequate funding and liquidity base, in line with the average of the Peruvian banking system....

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